An Easy Guide to Buying US Stocks from Malaysia
It may seem like a big step to buy US equities from Malaysia, but it's not as hard as you think. Plenty of beginners believe that trading in the US market is difficult, but it's actually pretty easy if you follow these steps. Here's how to own shares in huge names like Apple or Tesla, whether you want to diversify your portfolio or just want a piece of them.
To start, you'll need a investment account that lets you trade with people all around the world. US stock market crash history
Some of the top brokers for overseas investors are Interactive Brokers. The key is to pick one that has cheap fees and provides access to US markets. Most of the time, these brokers let you register accounts online, but you'll need to submit certain papers to prove who you are and where you live in Malaysia. So, remember to have ready your identification documents!
Next, you'll need to deposit money. At this point, things can be slightly tricky. Most of the time, you'll be transferring funds from Malaysia, and some brokers let you do this directly in Malaysian Ringgit (MYR). Some brokers might want you to change your money to USD before sending it. In either case, the process can take some time, so don't expect it instantly. Before you start trading, ensure sure your account is activated.
You can buy your first US stock as soon as you put money into your account. You can purchase shares in the same way you would at a local store: find the ticker, select the quantity you want to buy, and place your order. Some brokers also let you buy fractional shares, which means you don't have to buy a complete share if you're just starting out or don't have a lot of money to invest.
When you start buying US equities, there are a few things you should consider. First, you should consider how this would affect your taxes. Malaysia doesn't tax capital gains, but the US government might withhold tax on dividends. The tax rate is usually roughly 30, but if you're a foreign investor, you can often lower it by sending a W-8BEN form to your broker. This form verifies that you live outside the US and helps you get a reduced withholding rate under the US-Malaysia tax treaty.
The time zone difference is another thing to keep in mind. If you wish to trade during peak periods, you'll need to adapt your routine because the US stock market is open during US business hours. Just note the market hours, and you'll be good to go.
Lastly, the value of your equities will depend on the exchange rate between MYR and USD. If the Ringgit loses value compared to the dollar, it can be more expensive to acquire the identical stock. You should always monitor the conversion rate so you know when it's time to turn your Ringgit into dollars.
To sum up, it's easy to buy US stocks from Malaysia if you take the right steps. Simply choose a trading platform, add money to your account, place your order, and keep a watch on your taxes and the exchange rate. Good luck with your trades!